Emerging Markets Rates and Currencies Handbook

FX Spot FX Forwards NDFs FX Options Interest Rate Swap Interest Rate Options XCCY swaps Market Overview Onshore Market   ✗ ✗ ✗ ✗  Onshore Volume (MM USD Daily) Onshore Max Tenor (Or Typical Tenor For Spot) Onshore Typical Deal Size (MM USD) 1000-2000 T+2 2-5 200-400 1 year 2-5 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 1-3 years (*) 5-10 CitiFX Pulse Capabilities   ✗ ✗ ✗ ✗ ✗ * Typical tenor of CCY Swaps Source: Citi indicative information Market opening hours and liquidity during the day - Cut off for same day value: 15:30 VNM time - Cut off for tom, spot and forward value, 16:00 VNM time Regulation Spot - The VND is a restricted, non-deliverable currency. Only the SBV, credit institutions and branches of foreign banks, who are granted FX licenses by SBV may participate directly in the foreign exchange market. To purchase foreign currency against either VND or another foreign currency, supporting documents stating legal purposes, amount, currency, and payment date are required. The ceiling USD deposit rate is 0.0% for both corporate and individual customers. Non-resident can do the FX on-shore with limited functions (spot transactions, FX forward*, FX swap** only). * Applied for Non-residents are foreign investors who purchase Government Bonds in VND issued in onshore market ** To extend the tenor of the signed forward transaction of the bond as underlying. The forwards market is mainly entered by residents with an underlying need. The SBV restricts the tenors of FCY- VND FX forward and FX swap contracts to a minimum of three days and a maximum of 365 days. The tenor of FX forward and swap transactions for non-VND currencies will be decided by banks and their customers. The SBV sets the ceiling rates for USD-VND foreign exchange forward tenors. The maximum rate is set by the SBV using interest rate differentials based on the US Fed Funds target rate and the SBV’s refinancing rate. For offshore loans denominated in foreign currencies with the initial loan tenor or the remaining loan tenor greater than 365 (three hundred and sixty five) days, corporates are allowed to use Vietnamese Dong to purchase foreign currencies in forward transaction with tenor of 365 (three hundred and sixty five) days for the purpose of hedging exchange rate risks. Foreign investors who purchase Government Bonds in VND issued in onshore market, are allowed to purchase foreign currencies in forward transaction to hedge exchange rate risk of the invested bond. FX swaps are allowed to modify the tenor of the forward transaction, which is required written request from customers and documents to prove the change(s) to justify the objective reason, applicable only in case of change in payment plan. Note: only tenor is allowed to amend, not amending for other purposes. VND FX options are not permitted, though options in other currencies are still tradable. License Requirements No license required for clients entering the FX transactions with Vietnam onshore banks. Others - Foreign investors are required to buy VND or use legitimate VND funds to buy securities on stock exchanges and/or the OTC market. They are also able to sell VND to repatriate sale proceeds and income after all tax obligations have been fulfilled. Investors are subject to the tax regulations issued by the Ministry of Finance.